BT plans to close its original BT Vision service and swap its first-generation set-top boxes for new YouView replacements. It expects some customer churn as a result. BT now has a million television customers in the United Kingdom, adding 46,000 in the last quarter. BT added fewer television customers than Sky in the last two quarters, but fared better than Virgin Media, which saw a small loss of subscribers.
According to the informitv Multiscreen Index, Sky added 74,000 television customers in the last quarter, or 222,000 over the year, while Virgin Media lost 1,000 in the last quarter, contributing to a loss of 33,500 television customers in 12 months.
BT TV customers have finally passed the million park, adding 46,000 in the last quarter, which is less than the previous two quarters. In the same quarter a year previously there were 40,000 net additions. That was before the launch of BT Sport in August 2013. Since then, BT TV has added just 99,000 customers.
However, BT added 170,000 broadband customers in the last quarter, up from 150,000 in the previous quarter, to reach 7.28 million retail customers. Monthly average revenue per broadband customer has increased from £14.71 to £17.26 and revenue from broadband and television has increased by £208 million year on year to £1.36 billion.
Whether that justifies the investment in BT Sport remains a billion pound question. BT Retail recorded £183 million less operating cash flow in the year to the end of March 2014 than in the previous year.
There are now 3 million direct BT Sport customers, which includes those watching via satellite or online. Another 2 million have access through Virgin Media cable television, meaning BT Sport is now in around 5 million homes.
BT said in its annual earnings report: “We will be closing our first generation TV service in the first quarter of 2014/15. We will exchange legacy set-top boxes for new YouView boxes and anticipate some impact on TV customer churn during this period.”
BT is offering customers with its first generation silver BT Vision boxes a free replacement YouView box, provided they sign up to BT TV and broadband for a further 18 months by the end of June 2014. BT Sport channels will only be available to those that subscribe to the BT Infinity package, unless they have Sky or Virgin Media.
BT is now committed to YouView for its television platform, along with its direct competitor TalkTalk. At the last count TalkTalk had 732,000 customers with YouView.
Recently YouView said it is now in over a million homes, which implies that only a minority of BT TV homes are currently on the platform.
Despite the cost of swapping out its legacy boxes, standardising on the YouView platform will result in operational savings for BT and enable the development of new features, such as multiroom and multiscreen services.
YouView is planning to recruit 50 new developers, test engineers and project managers within the next year, following a five year funding settlement which will see the burden of its costs carried by BT and TalkTalk.
The informitv Multiscreen Index measures the performance of 100 satellite, cable and telco television and video services worldwide by their current digital subscription numbers. The latest report is available from multiscreenindex.com.